There was some major supply chain and procurement news in May — from the death of the Staples-Office Depot merger to Amazon Businesses turning one year old to procurement technology upgrades. We’ve rounded up our most popular articles from the last month, bringing you the best news and analysis from Spend Matters.
Amazon Business, previously known as AmazonSupply, turned 1 in May. In that first year, the business-focused service made nearly $1 billion in sales — pretty impressive. In this piece, Spend Matters Founder and Head of Strategy Jason Busch and Chief Research Officer Pierre Mitchell analyzed the growth of the company during its first year. The article also includes insight from Amazon Business Vice President and General Manager Prentis Wilson, who Spend Matters had a chance to catch up with. Get the details on the major success of Amazon Business and how we see it continuing to grow in the future in the full article.
In the article, co-authors Jason Busch and Pierre Mitchell wrote:
“For enterprise procurement and supply chain organizations, it should be pretty clear by now that Amazon Business is not just an experiment — it’s here for the long haul. The advantages Amazon brings across the supply chain aspects of fulfillment — down to the last mile — should be causing industrial distribution and MRO suppliers to think twice about the importance of Amazon as the competition of the future.”
Freelancing platform Upwork announced changes to its pricing model in May, changes that just went into effect on June 1. In this article, Andrew Karpie, Spend Matters research director, services and labor procurement, explained how Upwork went from a flat transaction fee to one that “appears to aim at aligning price to cost, encouraging high value freelancers to stick around, and most likely increasing profitability.” Karpie takes readers through the nitty-gritty details of the new pricing model — another signal that online freelance marketplaces are adapting to optimize business models, he said.
Why is this news significant? Karpie wrote:
“From a talent sourcing and procurement standpoint, we should be hoping that some of these businesses ‘get it right’ since they offer sources and digitally intermediated ways of delivering and consuming talent that other traditional suppliers cannot.”
A federal judge struck down the proposed merger between Staples and Office Depot in May, agreeing with the Federal Trade Commission that such a deal would limit competition in the market. In this article, Pierre Mitchell shared his thoughts and analysis on the failed merger and why he was surprised Staples wouldn’t try to appeal the court’s decision. He also shares what he has learned throughout this long merger proposal process and what the two companies will have to do to succeed as separate entities going forward.
“Both chains obviously need to continue reducing their physical asset footprints if they’re going to survive,” Mitchell wrote. “I’m not strategy consultant, but it seems like they will have to do something fundamentally different.”
Supply chain risk management is a becoming a major focus for organizations, as Pierre Mitchell and Michael Lamoureux pointed out in their jointly authored article. But risk management is tricky, as the two wrote: “Risk management, and what is necessary for ongoing risk management, never gets operationalized, and as new suppliers get added, supply shifts and supply chains change, new risk enters the picture — risks that go undetected unless risk management is embedded in all key procurement activities, including sourcing.”
Mitchell and Lamoureux list five tips procurement organizations can use to improve their sourcing process to lower risks. For example: make sure risk is ingrained in the sourcing process. Sounds like a major task, but with the right technology, it doesn’t have to be.
This may not be a major news item from May, but it was one of our top read posts of the month. It’s about a parody video Coupa put out on the sometimes rocky relationship between accounts payable and accounts receivable. Pierre Mitchell gives kudos in his article to the funny video that made him laugh out loud. Coupa put out the video for its Inspire conference last month — coverage of which you can also read up on at Spend Matters. If you haven’t seen the video, you can check it out here.